An IT Director Goes Shopping

One way tanking dot-coms have of paying off their debts to investors is to sell assets through auction. And therein lies an opportunity for the savvy network administrator to pick up bargains.

By Dian Schaffhauser

06/01/2001

MCP Magazine recently attended
an auction to watch one such bargain-hunter in
action. Brian Engelsen is the director of IT for
Pagoo Inc., a company that specializes in voice-over-IP
services. He attends many events run by DoveBid,
which holds business auctions worldwide. In this
particular auction, Engelsen hoped to pick up
a Cisco switch or two.

At 8:30 a.m. on the day of the auction,
Engelsen wandered through the offices of defunct
Pandesic (a well-funded venture of Intel and SAP),
evaluating the equipment for sale.

“The hard and fast rule I have for
auctions is, I always know how much I’m willing
to pay,” he said. “And I never violate the rule.
I don’t care if it goes over by a dollar.”

Engelsen picked through boxes sitting
in one office. “People should pay attention to
the nooks and crannies... there might be little
treasures hidden in the boxes.”

Pagoo runs a mix of Windows 2000,
Windows NT, and Unix, “depending on the application,”
Engelsen said. He comes to auctions to try to
save money on equipment that’s been budgeted for
already.

His research consists of getting
a list of what’s being sold ahead of time and
marking down what he wants. From there, he does
research on what the equipment would sell for
through the vendor’s resellers or eBay. He also
arrives with a screwdriver, prepared to open machines
to peer inside. His advice: “If it’s a desktop,
it’s best to fire it up. Servers will more than
likely work.”

By the time the auction began, the
“factory floor” was jammed with people holding
paper paddles showing their bid numbers. DoveBid
also broadcasts many of its auctions through its
Web site. If people are simply going to watch
the action, they tune into the Webcast. If they’re
going to bid, they also call by phone in order
to manage their bids real-time.

Auctioneer John Rademaker expected
several hundred people around the world to participate
online. The company was selling about a thousand
items and Rademaker said the auction would last
about five hours.

“We’ll go fast. If we’re selling
individual items, we’ll sell a hundred in an hour.”
(The auction actually lasted about twice that
long.)

In a situation where there are multiples
of the same item, the auctioneer will announce
“lot 100 through lot 129,” Rademaker explained.
“There are 30 IBM 300PL 500s. They’re all pretty
much the same. High bid can take as many as they
want and whichever ones they want. The high bidder
might take four or five. Then we say, ‘Who else
wants one at that price?’ More of them go out.
Then we say, ‘Ten left. Anybody else for individual
quantities?’ Next, it’s bid times 10. You take
them all.”

But the Webcast on this day created
problems. When a participant bid on an item, he
or she would click a button on the browser window;
to cancel the bid, he or she would click another
button. But there was a lag in the time it took
for that event to be acknowledged by the auctioneer.
For example, bidding on two Dell Latitude CXS
PIII Slim notebook computers reached $2,400 apiece
on the Web before the auction company noticed
that its bidders had dropped out. At that point,
Rademaker turned to those physically present and
redid the bidding. The units finally sold for
$925 each.

Six Compaq ProLiant 1600s with 512MB
of RAM and 27GB hard disks sold for $1,100 apiece.
Twenty-five Compaq disk arrays with between 24GB
and 109GB went for $650 apiece; the high bidder
chose which arrays he wanted from the bunch. Several
dozen IBM ThinkPads sold for $650 apiece; when
the bidding went into lot-sized quantities of
eight, the price came down to $525 each. A Cisco
Systems 7200 sold for $6,100; a 2600 series router
for $1,900.